Cameroon’s Biya warns of catastrophe for Central Africa monetary stability

YAOUNDE (Reuters) – Cameroon’s President Paul Biya warned on Monday of “disastrous penalties” for the international locations of the Financial and Financial Neighborhood of Central Africa if pressing motion shouldn’t be taken to deal with their deteriorating internet exterior reserves.

The member international locations – Cameroon, Gabon, Chad, Equatorial Guinea, Central African Republic, and the Republic of Congo – share financial coverage and a forex with a standard central financial institution.

Between them, they’ve struggled to emerge from the impression of the COVID pandemic and different exterior international shocks, leaving them wanting international trade or different belongings to cowl import payments and debt repayments.

They’re additionally going through challenges domestically together with a decline in oil manufacturing in 5 of the international locations, extended civil battle in Central African Republic and Cameroon, and a heavy debt burden in Gabon and default in Republic of Congo.

Biya referred to as for extra substantial actions to protect the macroeconomic and monetary stability of the area.

“In keeping with latest information, our internet exterior reserves have deteriorated significantly. This case is preoccupying and requires pressing motion from us to inverse this pattern,” Biya, stated in his opening remarks at a summit of the leaders in Cameroon’s capital Yaounde.

“If nothing is completed, in accordance with numerous consultants, we may face disastrous penalties for our international locations and the subregion.”

He didn’t give any particulars of what the implications is perhaps or how they is perhaps addressed, however any calls for from worldwide lenders to rein in spending by reducing subsidies or additional trimming handouts may trigger public discontent.

The Worldwide Financial Fund, which is represented on the summit together with the World Financial institution and different companions, warned in June that the six nations wanted decisive and coordinated actions to sort out fiscal and exterior imbalances.

The IMF cautioned that divergent financial efficiency and unchanged insurance policies among the many international locations may threaten monetary stability.